Builder confidence for new single-family homes dropped one
point to 16 in December, according to the National Association of Home Builders/Wells
Fargo Housing Index.
“From an affordability standpoint,
rarely has there been a better time in history to purchase a home, thanks to
record low interest rates, attractive prices, and of course the recent
extension and expansion of the home buyer tax credit,” said Joe Robson,
chairman of the NAHB and a home builder from Tulsa, Okla. “However, builders
are not seeing the full impact of these conditions on buyer demand, partly
because awareness of the latest incentives is still building, and partly
because of concerns about job security and other economic woes.”
David
Crowe, chief economist for the NAHB, said that the slight dip in December does
not come as a surprise.
“As we anticipated, this is shaping
up to be a bumpy recovery period for the housing market,” he said. “While some
families may be just starting to factor the expanded tax credit into their
potential home-buying plans, many are hesitating because of the poor economy.
At the same time, tight lending conditions for both consumers and home builders
continue to pose considerable obstacles on the road to a sustained housing and
economic recovery.”
Derived from a monthly survey that NAHB
has been conducting for more than 20 years, the index gauges builder
perceptions of current single-family home sales and sales expectations for the
next six months as “good,” “fair” or “poor.” The survey also asks builders to
rate traffic of prospective buyers as “high to very high,” “average” or “low to
very low.” Scores for each component are then used to calculate a seasonally
adjusted index where any number over 50 indicates that more builders view sales
conditions as good than poor.
The December HMI fell one
point to 16, its lowest point since June 2009. Two out of three component
indexes also were down, with a one-point decline to 16 registered for current
sales conditions and a two-point decline to 26 registered for sales
expectations in the next six months. The component gauging traffic of
prospective buyers remained unchanged at 13 for a third consecutive
month.
Regionally, December’s HMI results were mixed. The
Northeast posted a three point gain to 23, while the West posted a one-point
gain to 19, the South registered no change at 17, and the Midwest
posted a two-point decline, to 12.
Builder confidence down in December
February 1, 2010
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